2001 (1) TMI 131 - AT - Central Excise

Summary

Issues:
- Confirmation of demand of duty under Rule 9(2) and Rule 57-I
- Allegations regarding Modvat credit and reversal
- Demand of Central Excise Duty on goods cleared without payment
- Imposition of penalty and charging of interest
- Ambiguities in the compounded levy scheme
- Interpretation of Rule 96ZO(3) regarding duty on alloy and non-alloy steel products
- Applicability of compounded levy basis for non-alloy steel products
- Argument against charging duty twice based on furnace capacity and standard rates

Confirmation of demand of duty under Rule 9(2) and Rule 57-I:
The case involved an appeal against the confirmation of duty demand under Rule 9(2) and Rule 57-I, along with allegations of wrongly taken Modvat credit and imposition of penalty and interest. The Department alleged discrepancies in duty payment related to steel ingots production and clearance, leading to significant outstanding amounts.

Ambiguities in the compounded levy scheme:
The appellants raised concerns about ambiguities in the compounded levy scheme, particularly regarding the effective date of implementation and their eligibility under the scheme. They highlighted issues related to Notification No. 53/97-CE and the Capacity Based Duty Scheme introduced from 1-9-1997.

Interpretation of Rule 96ZO(3) regarding duty on alloy and non-alloy steel products:
The dispute revolved around the interpretation of Rule 96ZO(3) concerning the duty calculation for alloy steel ingots, stainless steel products, and non-alloy steel ingots. The appellants argued that they did not opt for the capacity-based scheme and should not be charged duty twice based on furnace capacity and standard rates.

Applicability of compounded levy basis for non-alloy steel products:
The authorities contended that duty on non-alloy steel products should be charged on a compounded levy basis, while duty on alloy steel and other products should follow the standard rate. The production quantities of non-alloy steel products influenced the duty calculation methodology.

Argument against charging duty twice based on furnace capacity and standard rates:
The appellants argued against being charged duty twice based on furnace capacity and standard rates for different steel products. They emphasized their production focus on alloy steel and steel castings, with non-alloy steel production being incidental. The Tribunal agreed that duty should not be charged twice and allowed the appeal in favor of the appellants.